Saturday, November 10, 2007

THE home owners opposed to the $500 million collective sale of Horizon Towers have renewed their complaints that the sale was not handled properly

THE home owners opposed to the $500 million collective sale of Horizon Towers have renewed their complaints that the sale was not handled properly, resulting in a price that was too low given a fast-rising market.

They were opening their case to stop the sale in front of the Strata Titles Board (STB) yesterday with a barrage of arguments.

They claimed that the sale committee and the property agent had mismanaged the sale process of the condominium.

It was the second day of the resumed STB hearing in which the majority owners are seeking approval to have the sale approved, after it was thrown out on a technicality in August.

They are battling it out with the minority owners who have filed objections to the sale. These objectors include three groups, each represented by different lawyers, along with two sets of owners representing themselves.

Hotel Properties (HPL) and its two partners have been trying to buy the 99-year leasehold Horizon Towers for $500 million, the estate’s reserve price that was set in April or May last year.

Opponents of the sale argued that by the time the deal was signed, that reserve price was too low, and out of date.

They said the $500 million price came with an 80 per cent premium - an inducement that had shrunk significantly by the time the estate was sold to the HPL consortium in January this year, due to a fast-rising market.

One witness, Mr Wee Hian Siew, who was the secretary of Horizon Towers’ first sale committee and one of the first to moot the idea of a sale, was called at the STB hearing yesterday.

He was asked numerous questions, including whether he knew about the rising market and why he did not ask for a fresh mandate for the $500 million offer from the owners, many of whom were said to have learnt of the sale via a newspaper report.

Mr Wee said he knew about the rising market and insisted that he was under the impression that the collective sale premium had slipped to about 40 per cent to 50 per cent, which he was happy with.

Earlier, one of the three minority owners’ lawyers, Mr Philip Fong of Harry Elias partnership, had asked if Mr Wee knew that Horizon Towers’ agent First Tree Properties was a tiny company with a paid-up capital of $50,000 for instance.

Also, he asked if he knew that the company had agreed to take a commission from the purchaser, instead of the owners as with usual practice. Mr Wee said he knew about it.

He later agreed that this would create a potential conflict but it was one that was not apparent to him when they were making the deal.

These were just some of the arguments brought up yesterday when the STB board also dismissed the case of a majority owner who wanted to participate in the hearing as an objector.